There is no statutory severance — it comes from your contract

The thing most people miss about Singapore: no law forces a company to pay retrenchment benefits.

The legal position

Singapore has no statutory requirement for severance pay. Retrenchment benefits are a matter of contractual agreement or company policy, not law.

Under the Employment Act, an employee with at least two years of continuous service is eligible for retrenchment benefits if specified in their employment contract or collective agreement.

If no such provision exists, the employer is not legally obligated to pay.

Your contract is the first place to look

The terms of your employment contract are binding on both parties. That should be your first recourse, followed by company internal policies.

The market norm

MOM's Tripartite Advisory on Managing Excess Manpower sets a norm of two weeks to one month of salary for each year of service.

Unionised firms usually pay a full month per year.

The Advisory recommends providing retrenchment benefits but does not mandate them.

Who is in the norm

Employees with at least two years of service. Those with under two years are not in the prevailing norm, though some employers still give an ex-gratia goodwill payment at their discretion.

Contract and fixed-term staff

Covered too, as long as the contract runs for at least six months.

Foreign employees

Workers on an Employment Pass, S Pass or Work Permit are treated the same way as locals for retrenchment benefit purposes. There is no separate rule that cuts them out.

Retrenchment benefit sits on top

It is in addition to notice pay and your final salary — not instead of them.

What actually determines what you get

Your contract, your company's finances, and how long you have been there.

Which is why reading the retrenchment clause before you sign matters more in Singapore than in most jurisdictions.

If there is a dispute

MOM or TAFEP can mediate retrenchment benefit disputes.